-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RmAADtU/906LZT0WTLLMtN3UsQ/kmNX7aRGNnSvx6YLwJgCllU5UBPOwDO7ri4aO Bmnh+70dBAxNrTcY1fBkrQ== 0000039911-97-000015.txt : 19970925 0000039911-97-000015.hdr.sgml : 19970925 ACCESSION NUMBER: 0000039911-97-000015 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970924 EFFECTIVENESS DATE: 19970924 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GAP INC CENTRAL INDEX KEY: 0000039911 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FAMILY CLOTHING STORES [5651] IRS NUMBER: 941697231 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-36265 FILM NUMBER: 97684752 BUSINESS ADDRESS: STREET 1: ONE HARRISON CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4159524400 MAIL ADDRESS: STREET 1: ONE HARRISON STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FORMER COMPANY: FORMER CONFORMED NAME: GAP STORES INC DATE OF NAME CHANGE: 19850617 S-8 1 As filed with the Securities and Exchange Commission on September 24, 1997 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 THE GAP, INC. (Exact name of issuer as specified in its charter) DELAWARE 94-1697231 (State or jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Harrison Street, San Francisco, CA 94105 (Address of Principal Executive Offices) The Gap, Inc. Nonemployee Director Deferred Compensation Plan (Full Title of the Plan) Anne B. Gust, Esq. The Gap, Inc. One Harrison Street San Francisco, CA 94105 (Name and address of agent for service) Telephone number, including area code, of agent for service: (415) 427-2000 Copies to: John E. Aguirre, Esq. Orrick, Herrington & Sutcliffe 400 Sansome Street San Francisco, CA 94111 Calculation of Registration Fee Title of Amount to Proposed Proposed Amount of securities to be registered maximum maximum fee* be registered offering aggregate price per offering share* price* Common Stock** 200,000 $52.25 $10,450,000 $3,166.67 shares * Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), on the basis of $52.25, the average of the high low prices of shares on the New York Stock Exchange on September 19, 1997. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents are incorporated by reference in this registration statement: (i) The Gap, Inc.'s (the "Company") latest annual report filed pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); (ii) all other reports filed by the Company pursuant to Sections 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Company's latest annual report; and (iii) the description of the Company's common stock set forth in the Company's Registration Statement on Form 8-B relating thereto, including any amendment or report filed for the purpose of updating such description. All documents filed by the Company after the date of this registration statement pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment (that indicates all securities offered have been sold or deregisters all securities then remaining unsold), shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES Inapplicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Inapplicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Certificate of Incorporation of the Company, as permitted in Section 102 of the General Corporation Law of the State of Delaware (the "GCL"), eliminates the personal liability of a director to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for (i) any breach of the director's duty of loyalty to the Company or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) paying a dividend or approving a stock repurchase in violation of Delaware law, or (iv) any transaction from which the director derived any improper personal benefit. Under the Bylaws of the Company, each director and officer of the Company is entitled to indemnification, to the fullest extent permitted by the GCL as the same exists or may hereafter be amended, against all expenses, liability and loss incurred in connection with any action, suit or proceeding in which he or she may be involved by reason of the fact that he or she is or was a director or officer of the Company. Section 145 of the GCL empowers a corporation to indemnify any director or officer, or former director or officer against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding (other than a derivative action) by reason of the fact that he or she is or was a director or officer or is or was serving at the request of the corporation as an agent of another entity, if he or she acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action, had no reasonable cause to believe his conduct was unlawful. In regard to a derivative action, indemnification may not be made in respect of any matter as to which an officer or director is adjudged to be liable unless the Delaware Court of Chancery, or the court in which such action was brought, shall determine such person is fairly and reasonably entitled to indemnity. The Company carries insurance policies in standard form indemnifying its directors and officers against liabilities arising from certain acts performed by them in their respective capacities as such. The policies also provide for reimbursement of the Company for any sums it may be required or permitted to pay pursuant to applicable law to its directors and officers by way of indemnification against liabilities incurred by them in their capacities as such. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Inapplicable. ITEM 8. EXHIBITS 4.1 The Gap, Inc. Nonemployee Director Deferred Compensation Plan (the "Plan"). 4.2 Amended and Restated Certificate of Incorporation of The Gap, Inc. (incorporated by reference to Exhibit 3.1 to the registrant's Annual Report on Form 10-K for the year ended January 30, 1993, Commission File No. 1-7562). 4.3 By-Laws of The Gap, Inc. (incorporated by reference to Exhibit C to the registrant's Proxy Statement for its May 24, 1988 annual meeting of stockholders, Commission File No. 1-7562). 4.4 Amended Article IV of By-Laws of The Gap, Inc. (incorporated by reference to Exhibit 4.4 to the registrant's Registration Statement on Form S-8, Commission File No. 333-00417). 4.5 Form of Discounted Stock Option Agreement under the Plan. 5.1 Opinion of Orrick, Herrington & Sutcliffe LLP. 15.1 Letter re unaudited financial information. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Orrick, Herrington & Sutcliffe LLP is contained in Exhibit 5.1 to this Registration Statement. 24.1 Power of Attorney of Directors. ITEM 9. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of the Plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Signatures THE REGISTRANT Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California on the 23rd day of September, 1997. THE GAP, INC. (Registrant) /s/ Millard S. Drexler Millard S. Drexler President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dated indicated. Signature Title Date Principal Executive Officer: /s/ Millard S. Drexler President and September 23, 1997 Millard S. Drexler Chief Executive Officer Principal Financial and Principal Accounting Officer: /s/ Warren R. Hashagen Senior Vice September 23, 1997 Warren R. Hashagen President and Chief Financial Officer Directors: * Adrian D. P. Bellamy Director September 23, 1997 * John G. Bowes Director September 23, 1997 * Millard S. Drexler Director September 23, 1997 * Donald G. Fisher Director September 23, 1997 * Doris F. Fisher Director September 23, 1997 * Robert J. Fisher Director September 23, 1997 * Lucie J. Fjeldstad Director September 23, 1997 * William A. Hasler Director September 23, 1997 * John M. Lillie Director September 23, 1997 * Charles R. Schwab Director September 23, 1997 * Brooks Walker, Jr. Director September 23, 1997 * Sergio Zyman Director September 23, 1997 *By: /s/ Anne B. Gust Anne B. Gust Attorney-in-Fact A majority of the members of the Board of Directors. EXHIBIT INDEX 4.1 The Gap, Inc. Nonemployee Director Deferred Compensation Plan (the "Plan"). 4.2 Amended and Restated Certificate of Incorporation of The Gap, Inc. (incorporated by reference to Exhibit 3.1 to the registrant's Annual Report on Form 10-K for the year ended January 30, 1993, Commission File No. 1-7562). 4.3 By-Laws of The Gap, Inc. (incorporated by reference to Exhibit C to the registrant's Proxy Statement for its May 24, 1988 annual meeting of stockholders, Commission File No. 1-7562). 4.4 Amended Article IV of By-Laws of The Gap, Inc. (incorporated by reference to Exhibit 4.4 to the registrant's Registration Statement on Form S-8, Commission File No. 333-00417). 4.5 Form of Discounted Stock Option Agreement under the Plan. 5.1 Opinion of Orrick, Herrington & Sutcliffe LLP. 15.1 Letter re unaudited financial information. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Orrick, Herrington & Sutcliffe LLP is contained in Exhibit 5.1 to this Registration Statement. 24.1 Power of Attorney of Directors. EX-4.1 2 THE GAP, INC. NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN THE GAP, INC., hereby adopts The Gap, Inc. Nonemployee Director Deferred Compensation Plan, as follows: 1 BACKGROUND, PURPOSE AND DURATION 1.1 Effective Date. The Plan is effective as of August 26, 1997. 1.2 Purpose of the Plan. The Plan is intended to increase incentive and to encourage Share ownership on the part of directors of the Company who are employees of neither the Company nor of any Affiliate, and to provide such directors with the opportunity to defer compensation on a pre-tax basis. The Plan also is intended to further the growth and profitability of the Company. 2 DEFINITIONS The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context: 2.1 "Affiliate" means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company. 2.2 "Board" means the Board of Directors of the Company. 2.3 "Company" means The Gap, Inc., a Delaware corporation, or any successor thereto. 2.4 "Compensation" means a Nonemployee Director's quarterly cash retainer for serving as a Nonemployee Director. A Participant's Compensation shall not include any other type of remuneration. 2.5 "Director" means any individual who is a member of the Board. 2.6 "Disability" means the permanent and total disability of the Participant, as determined by the Board in its discretion in accordance with uniform and nondiscriminatory standards adopted by the Board from time to time. 2.7 "Exercise Price" means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option. 2.8 "Fair Market Value" means the arithmetic mean of the highest and lowest quoted per Share selling prices for Shares on the relevant date, as quoted in the New York Stock Exchange Composite Transactions Index published in the Wall Street Journal, or if there were no sales on such date, the arithmetic mean of the highest and lowest quoted selling prices on the nearest day after the relevant date, as determined by the Committee. 2.9 "Fiscal Quarter" means a fiscal quarter of the Company. 2.10 "Fiscal Year" means the fiscal year of the Company. 2.11 "Grant Date" means, with respect to an Option, the date on which the Option was granted. 2.12 "Nonemployee Director" means a Director who is an employee of neither the Company nor of any Affiliate. 2.13 "Option" means an option to purchase Shares granted pursuant to Sections 5.2 and 5.3. 2.14 "Option Agreement" means the written agreement setting forth the terms and provisions applicable to each Option granted under the Plan. 2.15 "Participant" means a Nonemployee Director who has elected to make Compensation deferrals under the Plan and to receive an Option in lieu of such Compensation. 2.16 "Plan" means The Gap, Inc. Nonemployee Director Deferred Compensation Plan, as set forth in this instrument and as hereafter amended from time to time. 2.17 "Retirement" means termination of service on the Board on account of retirement pursuant to The Gap, Inc. Nonemployee Director Retirement Plan. 2.18 "Rule 16b-3" means Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and any future regulation amending, supplementing or superseding such regulation. 2.19 "Shares" means the shares of the Company's common stock, $0.05 par value. 2.20 "Termination of Service" means a cessation of the Participant's service on the Board for any reason. 3 ADMINISTRATION 3.1 Authority of the Board. The Plan shall be administered by the Board. It shall be the duty of the Board to administer the Plan in accordance with the Plan's provisions. The Board shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) interpret the Plan and the Options, (b) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, (c) interpret, amend or revoke any such rules, and (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Nonemployee Directors who are foreign nationals or employed outside of the United States. 3.2 Delegation by the Board. The Board, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more Directors or officers of the Company; provided, however, that the Board may not delegate its authority and powers in any way which would jeopardize the Plan's qualification under Rule 16b-3. 3.3 Decisions Binding. All determinations and decisions made by the Board, and any delegate of the Board pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 4 SHARES SUBJECT TO THE PLAN 4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the total number of Shares available for grant under the Plan shall not exceed 200,000. Shares issued under the Plan shall be treasury Shares only. 4.2 Lapsed Options. If an Option terminates, expires, or lapses for any reason, any Shares subject to such Option again shall be available to be the subject of an Option. 4.3 Adjustments in Options and Authorized Shares. In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of the Company affecting the Shares, the Board shall adjust the number and class of Shares which may be delivered under the Plan, and the number, class, and Exercise Price of Shares subject to outstanding Options, as the Board (in its sole discretion) shall determine to be appropriate to prevent the dilution or diminution of such Options. Notwithstanding the preceding, the number of Shares subject to any Option always shall be a whole number. 5 COMPENSATION DEFERRALS AND OPTIONS 5.1 Elections by Nonemployee Directors. Each Nonemployee Director's decision to become a Participant shall be entirely voluntary. 5.1.1 Current Nonemployee Directors. A Nonemployee Director who is such on August 26, 1997, may elect to become a Participant in the Plan by electing, no later than October 31, 1997, to defer receipt of all of his or her Compensation in exchange for an Option. An election under this Section 5.1.1 to make Compensation deferrals shall be effective for the remainder of the 1997 Fiscal Year (beginning with the quarterly payment that would be made for and in the fourth quarter ending January 31, 1998) and for each succeeding Fiscal Year, until changed by the Nonemployee Director in accordance with such procedures as the Board (in its discretion) may specify from time to time. 5.1.2 New Nonemployee Directors. A Nonemployee Director who first becomes such after August 26, 1997, may elect to become a Participant in the Plan by electing, within thirty (30) days of the date on which he or she first becomes a Nonemployee Director, to defer receipt of all of his or her Compensation in exchange for an Option. An election under this Section 5.1.2 to make Compensation deferrals shall be effective for the remainder of the Fiscal Year in which the election is made and for each succeeding Fiscal Year, until changed by the Nonemployee Director in accordance with such procedures as the Board (in its discretion) may specify from time to time. 5.1.3 Timing and Form of Elections. Notwithstanding any contrary provision of the Plan, the Board (in its sole discretion) shall determine the manner and deadlines for Participants to make elections under the Plan. 5.2 Terms of Options. 5.2.1 Grant Date of Options. Each Option shall be granted on the last business day of the Fiscal Quarter in which the Compensation deferred by the Nonemployee Director otherwise would have been paid to him or her. 5.2.2 Option Agreement. Each Option shall be evidenced by a written stock option agreement which shall be executed by the Participant and the Company. 5.2.3 Exercisability. Each Option shall be fully exercisable on its Grant Date. 5.2.4 Not Incentive Stock Options. Options granted under the Plan are not incentive stock options intended to meet the requirements of section 422 of the Internal Revenue Code of 1986, as amended. 5.2.5 Exercise. Options shall be exercised by the Participant's delivery of a written notice of exercise to the Secretary of the Company (or its designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. Upon the exercise of any Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Board, in its sole discretion, also may permit exercise (a) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price, or (b) by any other means which the Board, in its sole discretion, determines to both provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. As soon as administratively practicable after receipt of a written notification of exercise and full payment for the Shares purchased, the Company shall deliver to the Participant (or the Participant's designated broker), Share certificates (which may be in book entry form) representing such Shares. 5.3 Additional Terms of Options. 5.3.1 Number of Shares. The number of Shares subject to each Option shall be 625. 5.3.2 Exercise Price. The per Share Exercise Price for the Shares subject to each Option shall equal (a) minus (b), divided by (c). For purposes of this Section 5.3.2, (a) shall equal the Fair Market Value of such Shares on the applicable Grant Date, (b) shall equal the amount of the Participant's Compensation deferrals for the Fiscal Quarter which includes the Grant Date, and (c) shall equal 625. For example, if the Fair Market Value of the Shares covered by an Option is $27,500 and the Participant's Compensation deferrals for the Fiscal Quarter are $9,000, the Exercise Price per Share will equal $29.60 (i.e., $27,500 minus $9,000, divided by 625). 5.3.3 Expiration of Options. Each Option shall terminate upon the first to occur of the following events: (a) The expiration of seven (7) years from the Grant Date; or (b) The expiration of three (3) months from the date of the Participant's Termination of Service for a reason other than death, Disability or Retirement; or (c) The expiration of one (1) year from the date of the Participant's Termination of Service by reason of Disability or Retirement. 5.3.4 Death of Participant. Notwithstanding Section 5.3.3, if a Director dies prior to the expiration of his or her Option pursuant to Section 5.3.3, such Option shall terminate one (1) year after the date of his or her death. 6 MISCELLANEOUS 6.1 No Effect on Service. Neither the establishment or maintenance of the Plan, nor any action of the Company or the Board, shall be held or construed to confer upon any individual any right to continue as a member of the Board. 6.2 Indemnification. Each person who is or shall have been a member of the Board shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Option Agreement, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless. 6.3 Successors. All obligations of the Company under the Plan, with respect to Options granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 6.4 Beneficiary Designations. If permitted by the Board, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested Option shall be paid in the event of the Participant's death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Board. In the absence of any such designation, any vested Option remaining unexercised and unexpired at the Participant's death shall be paid to the Participant's estate and, subject to the terms of the Plan and of the Option Agreement, any unexercised vested Option may be exercised by the administrator or executor of the Participant's estate. 6.5 Nontransferability of Options. No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.4. All rights with respect to an Option granted to a Participant shall be available during his or her lifetime only to the Participant. 6.6 No Rights as Stockholder. Except to the limited extent provided in Sections 6.4 and 6.5, no Participant (nor any beneficiary) shall have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Option, unless and until certificates representing such Shares shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant (or beneficiary). 6.7 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Option (or exercise thereof), the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FUTA obligation) required to be withheld with respect to such Option (or exercise thereof). 6.8 Withholding Arrangements. The Board, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require a Participant to satisfy all or part of the tax withholding obligations in connection with an Option by (a) having the Company withhold otherwise deliverable Shares, or (b) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld. The amount of the withholding requirement shall be deemed to include any amount which the Board determines, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Option on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are required to be withheld. 7 AMENDMENT, TERMINATION, AND DURATION 7.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may amend or terminate the Plan, at any time and for any reason. The amendment or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Option theretofore granted to such Participant. 7.2 Duration of the Plan. The Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board's right to amend or terminate the Plan), shall remain in effect thereafter. 8 LEGAL CONSTRUCTION 8.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 8.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 8.3 Requirements of Law. The granting of Options and the issuance of Shares pursuant to the exercise of Options shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 8.4 Compliance with Rule 16b-3. All transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3. To the extent any provision of the Plan, an Option Agreement or action by the Board fails to so comply, it shall be deemed null and void, to the extent deemed advisable by the Board. Notwithstanding any contrary provision of the Plan, if the Board specifically determines that compliance with Rule 16b-3 no longer is required, all references in the Plan to Rule 16b-3 shall be null and void. 8.5 Governing Law. The Plan and all Option Agreements shall be construed in accordance with and governed by the laws of the State of California. 8.6 Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. EXECUTION IN WITNESS WHEREOF, The Gap, Inc., by its duly authorized officer, has executed the Plan on the date indicated below. THE GAP, INC. Dated: August 26, 1997 By /s/ Anne B. Gust Title: Senior Vice President and General Counsel EX-4.5 3 [FORM OF STANDARD DISCOUNTED OPTION AGREEMENT] THE GAP, INC. NON-QUALIFIED STOCK OPTION AGREEMENT Grant No. ______ The Gap, Inc. (the "Company") hereby grants to ___________ (the "Director"), a stock option under The Gap, Inc. Nonemployee Director Deferred Compensation Plan (the "Plan"), to purchase shares of common stock of the Company, $0.05 par value ("Shares"). This option is subject to all of the terms and conditions contained in this Agreement, including the terms and conditions contained in the attached Appendix A. The date of this Agreement is _______. Subject to the provisions of Appendix A and of the Plan, the principal features of this option are as follows: Number of Shares Purchasable with this Option: Price per Share: Date Option was Granted: Date Option is Scheduled to become Exercisable: Latest Date Option Expires: As provided in this Plan and in this Agreement, this option may terminate before the date written above, including before the option is exercised. For example, if Director's service ends for a reason other than death, Disability or Retirement, this option will terminate on the earlier of its normal expiration date or three months after the date on which Director's service ends. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS OPTION. IN WITNESS WHEREOF, the Company and the Director have executed this Agreement, in duplicate, to be effective as of the day and year first above written. Dated: THE GAP, INC. Donald G. Fisher Chairman of the Board My signature below indicates that I understand that this option is subject to all of the terms and conditions of this Agreement (including the attached Appendix A) and of the Plan. Dated: DIRECTOR Address: Social Security No.: APPENDIX A TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION 1. Grant of Option. The Company hereby grants to the Director under the Plan a non-qualified stock option to purchase, on the terms and conditions set forth in this Agreement and the Plan, all or any part of the number shares set forth on page 1 of this Agreement. The option granted hereby is not intended to be an Incentive Stock Option within the meaning of Section 422 of the Code. 2. Exercise Price. The purchase price per Share (the "Option Price") shall be equal to the price set forth on page 1 of this Agreement, which is the fair market value of the Shares subject to the option on the date of this Agreement, minus the amount of the Director's Compensation deferrals for the Fiscal Quarter which includes the date of this Agreement, and divided by 625 (rounded to the nearest whole cent). The Option Price shall be payable in the legal tender of the United States. 3. Number of Shares. The number and class of Shares specified in paragraph 1 above, and/or the Option Price, are subject to appropriate adjustment in the event of changes in the capital stock of the Company by reason of merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of the Company affecting the Shares. Such adjustments shall be made by the Board of Directors (the "Board"), whose determination in that respect shall be final, binding and conclusive. 4. Commencement of Exercisability. The option awarded by this Agreement shall be fully exercisable on the date of this Agreement. 5. Termination of Option. In the event of the Director's Termination of Service for any reason other than Retirement, Disability or death, the Director may, within three (3) months after the date of such Termination of Service, or within seven (7) years from the date of this Agreement, whichever shall first occur, exercise any unexercised portion of the option. In the event of the Director's Termination of Service by reason of his or her Retirement or Disability, the Director may, within one (1) year after the date of such Termination of Service, or within seven (7) years from the date of this Agreement, whichever shall first occur, exercise any unexercised portion of the option. In the event that the Director shall die prior to the expiration of his or her option, any unexercised portion of the option may be exercised by the Director's beneficiary or transferee, as hereinafter provided, for a period of one (1) year after the date of the Director's death. 6. Persons Eligible to Exercise. The option shall be exercisable during the Director's lifetime only by the Director. The option shall be non- transferable by the Director other than by a beneficiary designation made in a form and manner acceptable to the Board, or by will or the applicable laws of descent and distribution. 7. Death of Director. To the extent exercisable after the Director's death, the option shall be exercised only by the Director's designated beneficiary or beneficiaries, or if no such beneficiary is designated, by his or her legal representative. Any transferee exercising the option must furnish the Company (a) written notice of his or her status as transferee, (b) evidence satisfactory to the Company to establish the validity of the transfer of the option and compliance with any laws or regulations pertaining to said transfer, and (c) written acceptance of the terms and conditions of the option as prescribed in this Agreement. 8. Exercise of Option. The option may be exercised by the person then entitled to do so as to any Shares which may then be purchased by giving written notice of exercise to the Company, specifying the number of full Shares to be purchased and accompanied by full payment of the purchase price thereof (and the amount of any income tax the Company is required by law to withhold by reason of such exercise). 9. No Rights of Stockholder. Neither the Director nor any person claiming under or through said Director shall be or have any of the rights or privileges of a stockholder of the Company in respect of any of the Shares issuable upon the exercise of the option, unless and until certificates representing such Shares shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Director. 10. No Effect on Service. Nothing in this Agreement shall confer upon the Director the right to continue in service on the Board. 11. Addresses for Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of its Law Department, at The Gap, Inc., One Harrison Street, San Francisco, California 94105, or at such other address as the Company may hereafter designate in writing. Any notice to be given to the Director shall be addressed to the Director at the address set forth beneath the Director's signature hereto, or at such other address as the Director may hereafter designate in writing. Any such notice shall be deemed to have been duly given if and when enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified and deposited, postage and registry fee prepaid, in a United States post office. 12. Non-Transferability of Option. Except as otherwise herein provided, the option herein granted and the rights and privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of said option, or of any right or privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale under any execution, attachment or similar process upon the rights and privileges conferred hereby, said option and the rights and privileges conferred hereby shall immediately become null and void. 13. Maximum Term of Option. Notwithstanding any other provision of this Agreement except the last sentence of Paragraph 5 above relating to the death of the Director (in which case this option is exercisable to the extent set forth therein), this option is not exercisable after the expiration of seven (7) years from the date of this Agreement. 14. Binding Agreement. Subject to the limitation on the transferability of the option contained herein, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto. 15. Plan Governs. This Agreement is subject to all the terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan shall govern. Terms used and not defined in this Agreement shall have the meaning set forth in the Plan. 16. Board Authority. The Board shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Board in good faith shall be final and binding upon Director, the Company and all other interested persons. No member of the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement. 17. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 18. Agreement Severable. In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement. 19. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. The Director expressly warrants that he or she is not executing this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. EX-5.1 4 September 22, 1997 The Gap, Inc. One Harrison Street San Francisco, CA 94105 Re: The Gap, Inc. Registration Statement on Form S-8 Ladies and Gentlemen: At your request, we are rendering this opinion in connection with the proposed issuance pursuant to The Gap, Inc. Nonemployee Director Deferred Compensation Plan (the "Plan"), of up to 200,000 shares of common stock, $0.05 par value ("Common Stock"), of The Gap, Inc., a Delaware corporation (the "Company"). We have examined instruments, documents, and records which we deemed relevant and necessary for the basis of our opinion hereinafter expressed. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in the records, documents, instruments, and certificates we have reviewed. Based on such examination, we are of the opinion that the 200,000 shares of Common Stock to be issued by the Company pursuant to the Plan are validly authorized shares of Common Stock, and, when issued in accordance with the provisions of the Plan, will be legally issued, fully paid, and nonassessable. We hereby consent to the filing of this opinion as an exhibit to this Registration Statement on Form S-8 and to the use of our name wherever it appears in the Registration Statement. In giving such consent, we do not consider that we are "experts" within the meaning of such term as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission issued thereunder with respect to any part of the Registration Statement, including this opinion, as an exhibit or otherwise. Very truly yours, /s/ ORRICK, HERRINGTON & SUTCLIFFE LLP ORRICK, HERRINGTON & SUTCLIFFE LLP EX-15.1 5 Deloitte & Touche LLP 50 Fremont Street Telephone: (415)247-4000 San Francisco, California 94105-2230 Facsimile: (415)247-4329 September 22, 1997 The Gap, Inc. One Harrison Street San Francisco, California, 94105 We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of The Gap, Inc. and subsidiaries for the periods ended August 2, 1997, August 3,1996, May 3, 1997, and May 4, 1996, as indicated in our reports dated August 12, 1997, and May 14, 1997 respectively; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which were included in your Quarterly Reports on Form 10-Q for the quarters ended August 2, 1997, and May 3, 1997, are being used in this Registration Statement on Form S-8. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ Deloitte & Touche LLP Deloitte & Touche LLP San Francisco, California EX-23.1 6 Deloitte & Touche LLP 50 Fremont Street Telephone: (415)247-4000 San Francisco, California 94105-2230 Facsimile: (415)247-4329 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of The Gap, Inc. on Form S-8 of our report dated February 27, 1997 incorporated by reference in the Annual Report on Form 10-K of The Gap, Inc. for the year ended February 1, 1997. /s/Deloitte & Touche LLP San Francisco, California September 22, 1997 EX-24.1 7 POWER OF ATTORNEY OF DIRECTORS KNOW BY ALL PERSONS BY THESE PRESENTS: Each of the undersigned hereby constitutes and appoints Donald G. Fisher and Anne B. Gust, each of them with power to act alone, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign a Registration Statement on Form S-8 relating to 200,000 shares of common stock issuable under The Gap, Inc. Nonemployee Director Deferred Compensation Plan, and any and all amendments of such Registration Statements, including post-effective amendments, and to file the same, together with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises hereof, as fully to all intents and purposes as he or she might do or could do in person, thereby ratifying and confirming all that said attorney-in-fact or his or her substitutes may lawfully do or cause to be done by virtue hereof. /s/ Adrian D.P. Bellamy Date: August 26, 1997 Adrian D. P. Bellamy /s/ John G. Bowes Date: August 26, 1997 John G. Bowes /s/ Millard S. Drexeler Date: August 26, 1997 Millard S. Drexler /s/ Donald G. Fisher Date: August 26, 1997 Donald G. Fisher /s/ Doris F. Fisher Date: August 26, 1997 Doris F. Fisher /s/ Robert J. Fisher Date: August 26, 1997 Robert J. Fisher /s/ Lucie J. Fjeldstad Date: August 26, 1997 Lucie J. Fjeldstad /s/ William A. Hasler Date: August 26, 1997 William A. Hasler /s/ John M. Lillie Date: August 26, 1997 John M. Lillie /s/ Charles R. Schwab Date: August 26, 1997 Charles R. Schwab /s/ Brooks Walker, Jr. Date: August 26, 1997 Brooks Walker, Jr. /s/ Sergio Zyman Date: August 26, 1997 Sergio Zyman -----END PRIVACY-ENHANCED MESSAGE-----